Which of the Following Is Not a Qualitative Factor That

question 20

Multiple Choice

Which of the following is not a qualitative factor that may affect an auditor's establishment of materiality?

• A)Potential for fraud.
• B)The company is close to violating loan covenants.
• C)Firm policy sets materiality at 4% of pretax income.
• D)A small misstatement would interrupt an earnings trend.

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Definitions:

Harry Harlow

A psychologist known for his research on attachment in rhesus monkeys, emphasizing the importance of caregiving and companionship.

Cognitive Map

A mental representation of one's physical environment's layout.

Classical Conditioning

A pattern of learning where two stimuli are habitually paired; consequently, a response initially generated by the second stimulus becomes generated by the first stimulus.

Social Learning Theory

A theory proposing that people can learn new behaviors and information by watching other people (also known as observational learning).